Dr Reddy's Q4 PBT up 22% at Rs 714 cr on buoyant US, European business

The company has registered 10% growth in revenues at Rs 4,431.8 cr for the quarter under review from Rs 4,016.6 cr in the year-ago period

Drug major Dr Reddy's Laboratories Limited has reported a 22 per cent increase in profit before tax (PBT) at Rs 714.2 crore for the fourth quarter ended March 31, on the back of a greater contribution of revenues from the US and the European markets. 

The company has registered 10 per cent growth in revenues at Rs 4,431.8 crore for the quarter under review from Rs 4,016.6 crore in the corresponding quarter previous year.

For the full year 2019-20, Dr Reddy's PBT declined 20 per cent to Rs 1,803.2 crore from Rs 2,244.3 crore in the previous financial year. However, its revenues for the full year grew 13 per cent at Rs 17,460 crore from Rs 15,385 crore in 2018-19. The decline in PBT for the full year was attributed to an impairment charge of over Rs 1,600 crore in the third quarter.

"FY20 has been a very positive year for the company. Progress made during the year includes VAI(voluntary action in) status for CTO 6, health product pipeline build up, productivity improvement, and strong financial performance across our businesses," Dr Reddy's co-chairman and managing director G V Prasad said.

The global generics (GG) revenues at Rs 3,693.8 crore, up 20 per cent year-on-year from Rs 3,038.4 in the corresponding previous quarter, was due to a strong performance of Dr Reddy's in the US and the European markets. While the US contributed Rs 1,807.2 crore to the GG segment with a 21 percent growth over Rs 1,495.7 crore in the year ago period.

European revenues grew 80 per cent to Rs 344.6 crore during the same period, while registering 49 per cent growth at Rs 1,107 crore for the full year, primarily on account of volume traction in base business and new product launches, the company said.

However, India revenues saw a single-digit growth of 5 per cent, at Rs 683.9 crore and the revenues from Emerging Markets, which include Russia, rose 15 per cent to Rs 804.2 crore, surpassing the domestic business of the company. Revenues from domestic business saw a sequential decline of 10 per cent, partially impacted due to logistics related disruptions caused by Covid-19 lockdown, the company said.

Explaining its performance in the North American Generics(NAG) business during the fourth quarter, Dr Reddy's said the year-on-year growth of 21 per cent and sequential growth of 13 per cent was supported by contribution from new product launches and increase in volumes for existing products. The volumes were higher partially due to Covid-19 related stocking up, according to the company. 

During the quarter, the pharmaceutical services and active ingredients (PSAI) segment gew 6 per cent to Rs 719.5 crore while the proprietary products business further shrunk by 76 per cent to Rs 72.5 crore.

On the profitability front, the company's gross profit margin for the fourth quarter ended March 31 declined by 90 basis points at 51.5 per cent as in the year ago period the company recognised revenue from sale of its three products from the dermatology business. For the full year the gross profit margin stood at 53.8 per cent, a 40 bps decline over previous year primarily on account of price erosion in the US, Europe and certain emerging markets and region mix, the company said.